In tight times as well as good, commercial enterprises in
building and other spheres run the risk of having confidential
information misused. This can concern joint venture or partnership
operations as much as the problem with former employees, as all key
actors in an enterprise or project by necessity will engage in
information or data sharing.

As with a building contract, it is tempting to assume everything
will be fine at the outset when relationships are good, but
unfortunately, relationships can sour and then commercially
sensitive problems can arise. Therefore you will find that
instruments such as joint venture agreements and employment
contracts will need to deal properly with rights to confidential
information.

As opined in a recent article of mine, high volume builders in
particular will need to take action from time to time to preserve
their "intellectual property" or copyright in a design.
Failure to make a strong statement when a possible breach of IP
rights is discovered can lead to repetitions of the wrongful
conduct over and above an initial loss of business.

In fact the parties do not need to even be in a joint venture,
partnership or employment arrangement before such considerations
are paramount. For instance, a large volume builder that is
contracting to carry out construction for a developer client
involved in large scale development, may have an ongoing
interaction with that client that extends beyond just one contract
or project. Inevitably there will be some knowledge or insight
gained by the client into the pricing or supplier information of
the Builder.

As good as a working relationship may be, it is still a business
interaction involving competing commercial interests. If 'back
to back' or mirror clauses are incorporated into a contract (or
indeed put into a 'stand alone' confidential information
agreement) then both parties are protected in regard to information
or document sharing and there is no need for either party to feel
insulted or take umbrage.

So what is confidential information? If is more far reaching
than just intellectual property, though of course "IP"
can be a subset of information that is confidential in a working
arrangement.

A standard confidential information agreement will have a
definitions section near the front of the document, that will have
a clear definition of what can be included within the purview of
'confidential information'.

The sorts of elements that comprise the definition can include
any of the following, for example:

financial, technological, strategic or business
information;

trade secrets, know-how, process and techniques;

business and marketing plans and projections;

software or computer records, client or supplier lists;

details of agreements or arrangements with third parties;

lists of contractors and employees of a company and their
agents;

designs, plans, drawings and models; or

any other information obtained during the course of employment
or a joint undertaking with a company, that by its nature is
confidential to that company.

Of course when tailoring an agreement to suit the needs of the
parties, the above definition can be an expansive one incorporating
all possible elements, or it can be more narrow
and specific in identifying that which needs to be protected.

Further to this, such an agreement can and should provide
exceptions detailing when the dissemination of such information
would not be regarded as a breach of agreement. For example, if the
information concerned is trivial in nature, is already public
knowledge when disclosed, or if it comes into your knowledge other
than by a breach of confidentiality by some third party.

The agreement should specify the parties' duties in regard
to confidential information acquired from another source, and this
may include what is to be done when the business relationship ends.
For instance, with employment contracts it will state that all
computer records, customer lists etc that the employee has will be
physically returned to the employer when the position is
terminated, and there will be a run off provision that says the
former employee must respect confidentiality even after the
employment contract ends.

In addition, there needs to be provision in regard to those
parties or entities where the disclosure of confidential
information is not a breach of agreement. This may include the
right of 'the recipient' to disclose the confidential
information to:

a director, employee, agent or contractor of the
recipient;

a person other than any of the above where the discloser of the
confidential information consents in writing to the disclosure to
that person;

a third party where the disclosure is required by law, statute
or regulatory rule or if ordered by a court.

If any professional engaged in commercial enterprise, including
building practitioners, needs advice on their rights and how best
to take action to protect themselves, or if they suspect a breach
is already occurring, they should seek prompt assistance from
lawyers with expertise in commercial advice.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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